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UPDATE 1-Nigeria naira drops to record intra-day low on spot market

Published 01/02/2021, 16:54
Updated 01/02/2021, 17:00
© Reuters.

(Adds details)
ABUJA, Feb 1 (Reuters) - The Nigerian naira fell to a record
intra-day low of 415.95 per dollar on the spot market on Monday
after easing on the derivatives market, traders said.
The futures market for five-year settlement dropped to a
record low of 613.69 naira per dollar while the futures contract
with three weeks to maturity fell to 405.13 per dollar, close to
where the two-month forwards quoted the currency.
Dollar demand has been growing, putting pressure on the
naira. Importers with past due obligations have scrambled for
hard currency while providers of foreign exchange, such as
offshore investors, have exited.
Traders said the central bank has yet to resume dollar sales
this year to foreign investors seeking to repatriate funds and
that the bank did not sell forex to companies last week.
The naira, which was devalued twice last year on the
official market, lost 11.2% on the over-the-counter spot market
in 2020.
It traded at 480 naira on the black market on Monday, 20%
weaker than the official rate of 381 naira set in July and
backed by the central bank.
Analysts say the naira is around 15% over-valued, citing the
12-month forward quote of 459 naira to the dollar.

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